The number of initial public offerings of stock issued in a

The number of initial public offerings of stock issued in a 10-year period and the total proceeds of these offerings (in millions) are shown in the table. Construct and interpret a 95% prediction interval for the proceeds when the number of issues is 668. The equation of the regression line is y = 32.240x + 17,187.609. Construct and interpret a 95% prediction interval for the proceeds when the number of issues is 668. Select the correct choice below and fill in the answer boxes to complete your choice. A. There is a 95% chance that the predicted proceeds given 668 issues is between $ and $. B. We can be 95% confident that when there are 668 issues, the proceeds will be between $ and $.

Solution

Minitab output for the prediction interval is

redicted Values for New Observations

New Obs Fit SE Fit 95% CI 95% PI
1 38724 4349 (28695, 48753) (19342, 58106)

95% prediction interval when number of issues 668 is (19342, 58106)

This means that there is 95% probability that the real value of y ( proceeds) corresponding to no.of issues (x=668) with in this interval.

A. There is 95% chance that the predicted proceeds given 668 issues is between $19342 and $58106.